Team 26: Technology of the Week.

For the technology of the week we (team 26) decided to compare two big players in the Dutch event ticket industry; Ticketswap and Ticketmaster. Ticketmaster was one of the first players in the electronic market for tickets. More recently Ticketswap proved to be a new (disruptive) player, profiling themselves as a trustworthy reseller of tickets.

Ticketswap

Ticketswap is a small Dutch company with only ten employees that acts as a trusted intermediary between sellers and buyers of second-hand tickets. In just two years they have grown to 100.000 users and they are expanding to Germany, France, the United Kingdom and Belgium.

Ticketmaster

Ticketmaster is a well-known company for people who have been to an event in the past. They started in 1978 already with one of the first online ticket selling systems. Currently they are one of the biggest players in the world and more recently they became also active in the second-hand sport ticket market in the US.

Ticketswap and Ticketmaster compared

Business Models

Ticketmaster charges a service fee on top of the ticket price but they also make use of exclusive right of sales contracts. These measures are driving the ticket price up and new business models are emerging that cut out the middleman, like Ticketmaster.

Ticketswap, in contrast is the middleman in second-hand tickets and also charges a service fee. The users rely on the verification process of Ticketswap to get real tickets against a fair price. Dangers for Ticketswap its business model, of course are companies like Ticketswap setting up their own electronic secondary market.

Profitability

Ticketmaster and Ticketswap show a clear distinction in their pricing strategies. The service fee of Ticketswap is variable and can go up to 25% of the ticket face value while the Ticketswap fee is fixed for both parties (seller and buyer).

This leads to a greater profit for Ticketmaster since the primary ticket market is always larger than the secondary market. Ticketmaster is also in position to adjust the service fee depending on the popularity of the event.

Brand image

Ticketmaster is less popular amongst the greater public because of its dominance in the ticket market. It is almost impossible to work around Ticketmaster when aiming for a ticket for a popular event.

Ticketswap is a fair company with fixed service fees and a 125% price cap for their tickets. People perceive this safety as positive.

Social Media

This summer almost everyone must have had a friend wanting to buy or sell a ticket via Ticketswap. Ticketswap makes great use of social media to let its user base and reach grow. Ticketswap is rather passive with its social media strategy.

Conclusion

Ticketswap is a new and fast company using a disruptive technology, but their business model is somehow easy to copy making big players like Ticketmaster a threat to them. We will see what the future will bring us. Will Ticketmaster acquire Ticketswap? Will Ticketmaster have to change its business? Technology will show.

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